Employee Attrition

Employee Attrition (aka Turnover) is a common metric that is used to measure the number of people that have left a position they were employed to do, expressed as a percentage of the total workforce.

You may also be interested in Employee Retention which is a related, but different metric.

6 Different types of employee attrition:

Attrition can actually be expressed a number of ways so it pays to understand what type of attrition is being referred to.

Internal 

When staff leave to work in other departments/sections within the same organisation (which is not necessarily a bad thing)

External 

When employees leave the organisation altogether (normally a pretty bad sign).

Positive 

Losing people that can be replaced with someone better skilled, qualified or motivated.

Normally that means you have exited poor performing employees (through performance management).

Negative

Losing talent and skills that you would have preferred to hang onto.

Involuntary 

When the decision to end employment is made by the Employer.

Within Involuntary attrition, it can be further defined as Termination or Retrenchment.

Termination means the employment ceased due to performance related matters (typically within the control of the employee) and Retrenchment is when the company makes the decision to reduce the size of the workforce which is typically outside of the employee’s control.

Voluntary 

Voluntary attrition is the employee decided to leave on their own decision for either personal or professional reasons.

What is normal contact centre industry attrition?

In Australia, the widely used figure has always been around 40% turnover per annum.

However, the most recent 2018 Australian Call Centre Industry Report suggested the figure was as low as 19% for full-time employees.

In offshore contact centres, there have been examples of attrition figures as high as 140%.

How do you calculate attrition?

At first glance, the formula for calculating attrition can look at bit tricky so I’m going to give you a nice simple way of doing it.

Assume you started the year with 50 employees, and ended the year with 60 employees.

And over the course of the year, 20 employees left.

This is how you would calculate the attrition rate:

20 / ((50+60) / 2)

= (20 / 55) x 100

= 36.36%

The actual formula is:

(Number of employees who left) / (average number of employees) = attrition rate

You can do this over a week, a month or a year.

My recommendation is to calculate monthly so you can monitor trends and make decisions accordingly.

What are the drivers for attrition?

One of the biggest drivers of attrition in a workplace is a lack of engagement or poor leadership, both of which are often related.

In fact according to a 2018 survey of over 10,000 employees by Hyphen, ‘management’ is the primary cause of 81% of respondents citing management as the motivating factor to leave.

 
Category%
1Management81
2Alignment & Involvement73
3Employee Enablement69
4Collaboration & Team Work65
5Feedback & Recognition62
6Investment in People57
7Compensation & Benefits53
8Company Confidence46
9Social Connection26
10Company Performance21

Of course, it’s different for each company so to better understand why your employees are leaving, I’d recommend completing an Exit Survey for all departing employees.

Next steps

To make sure you are taking positive steps to reduce employee attrition we’ve got some handy links for you below:

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